Here's a GJ chart I am looking at right now... and I offer a little story.
Zoomed right out on H4 I see a BIG "W" on the final leg forming .. it's pretty loud and clear. Only two things to come from here... a break lower to break the "W" but that won't happen without a fight or a bounce higher to the middle of the W at least. Either way it's going to be huge and should provide direction for October.
If I take a view that there's a 50% chance price will bounce up then there are a few things I need to look for along the way.
1. H4 SuperSlope turning blue.
2. There will be opportunities to jump in and out following M15 and H1 SuperSlope on the first part of this journey once H4 SuperSlope is blue but nothing is confirmed and nothing is for sure during this first "wave". Scalping is the word. At this point I know my "view" may well be wrong, I'll be looking out for high impact news and I won't hold losing trades long.
3. Once first "wave" has formed and completed ideally with a higher low and tested support I start to breathe and believe my analysis might be right. This is a much easier time to look for entries. Online news stories would all be suggesting that GBPJPY is going to break lower and a lot of retail traders will be back in short at this point but I'd be waiting for M15, H1 and H4 SuperSlope all lighting up blue to jump in as price takes off up again. D1 CSS will still be ranging at this point.
(I still personally often get it wrong here, getting in too early, getting stopped out if I use a SL or feel like I am ending up with a hedge that never ends but if I am patient and wait for SuperSlope and price action to show the way I know I just have to trust there is a BIG move ahead and if I can stay strapped onto the rollercoaster it's going all the way to the bank).
I have learnt to use hedging rather than SL where necessary here because if I am wrong and a news story breaks price lower to break the W and shows my "view" as incorrect then my hedged trades will eventually bring profit. If my position size is 0.01 then I trade 0.02 in the opposite direction and then the initial direction etc until the move plays out either way. My total position size will only ever be 0.01 but whichever way price breaks I get paid.
4. Now we are into a corrective scenario like the way I have been trading EU this week. Time to readjust and be happy with smaller profits and see what comes next.
5. If price breaks out again in the same direction then D1 CSS should now also be shouting breakout ..this can offer the longest ride of the story but I watch for false breakouts too. Only buy above tested support or sell below tested resistance is a good rule here.
Peeps into Hurst cycles and Elliot wave theory may well be able to continue this story better than I so I'll leave it here for now but hopefully gives a picture of how I analyze and how I trade. The rest is practice and chance to write your own story
.......who's next?
